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Counsel Probes Water District

Vineyard Haven Town Attorney Finds Independent Practices of Tisbury Water Company Are Outside the Law

By MAX HART

The Tisbury water department, which historically has functioned as
an independent entity with separate bank accounts and its own treasurer,
has no legal authority to conduct many of these independent practices, a
town attorney has found.

"In my opinion, the historical autonomy practiced by the board
of water commissioners is not grounded in the language of Chapter 394
[the 1905 enabling legislation for the water company] or state
law," wrote Michele Randazzo, an attorney at Kopelman and Paige in
Boston, in an opinion this week.

The eight-page opinion was received by Tisbury town administrator
John Bugbee on Tuesday. The opinion is critical of many water department
practices - several of which the town attorney calls unlawful.
Among other things, she finds that the water company has been
improperly:

* Administering its own payroll system.

* Maintaining separate bank accounts.

* Hiring its own legal counsel and financial auditor.

* Retaining profits and surpluses monies.

* Investing funds in interest bearing accounts.

* Negotiating contracts and electing its own treasurer.

The opinion comes three months after the Tisbury selectmen expressed
outrage over the salaries and benefits package commissioners awarded to
water department superintendent Deacon Perrotta and administrator Lois
Norton. Mr. Perrotta and Ms. Norton, who oversee both the Vineyard Haven
and Oak Bluffs water systems, make over $100,000 - $50,000 from
each town - under five-year contracts. Their salaries make them
among the highest paid public employees on the Vineyard.

Selectmen said the length of the contracts and the benefits packages
for Mr. Perrotta and Ms. Norton are out of line with other Tisbury
employees. At the annual town meeting in April, selectmen tried
unsuccessfully to reduce the salaries by amending the water department
budget on town meeting floor.

Selectmen decided to take a closer look at the practices of the
water department, which has historically functioned with a good deal of
autonomy. In May, the board issued a public records request for all
water department meeting minutes involving Mr. Perrotta and Ms.
Norton's contract negotiations, as well as the financial audits
from the last six years. All the information was passed along to Ms.
Randazzo for a legal opinion.

As of yesterday, neither the selectmen nor the water commissioners
had met to discuss the opinion, and several selectmen and commissioners
had not yet seen the document. Mr. Bugbee said his board hoped to meet
with the water commission sometime next week.

Selectman Tristan Israel said yesterday that he had not read the
decision yet, and that he was sorry to see a newspaper story come out
before his board and the water company had had the time to read and
digest the opinion from counsel.

"I am disappointed that this has come out before the selectmen
have had a chance to talk about it, but what we will do is take this
information and discuss it and meet with the town water department
- and take it from there," Mr. Israel said.

Water commission chairman David Schwab said yesterday that he, too,
had not read or even received the opinion.

"All I can say is that we haven't done anything
differently in the last five years from what we have done in the last
50," Mr. Schwab said. "Maybe somebody made a mistake back in
1952, but I don't know. I am not a lawyer."

The Tisbury water department has traditionally operated
independently even though it is a town department. Water commissioners
manage department finances with very little oversight from town hall,
and the water department budget has frequently been exempted from review
by the finance and advisory committee. Selectmen and water commissioners
seldom meet.

Issues over control of the water department date back almost two
decades. In the late 1980s, selectmen and water commissioners squared
off in court over who had exclusive authority concerning wages, hours
and other terms of employment for water department employees. A superior
court judge declared that the selectmen - not the water commission
- hold that authority.

Ms. Randazzo's opinion hinges on her belief that Chapter 394,
the enabling legislation that created the department in 1905, does not
create the water supply system as a separate legal entity autonomous
from the town.

"As such, there appear to be a number of practices of the
water commissioners that are not in accordance with state law,"
she wrote.

An audit for the water department from last year showed that the
department had $1.57 million in surplus cash. State law requires all
surplus over $1,000 to be either returned to the town treasurer or used
to reduce the water rate.

"It is my opinion that all water department funds are to be
maintained in accounts administered by the town treasurer, in the same
manner as any department revenues for which separate enterprise or
revolving funds have not been established," Ms. Randazzo wrote.
"Surplus amounts . . . . should be returned to the town's
general fund, or the water rates should be reduced accordingly. At the
very least, it would be reasonable to expect that the town be repaid the
monies it pays for water department salaries and wages, and employee
benefits."

Ms. Randazzo found that the water department has not been
irresponsible, only lacking in accountability.

"While it has not been suggested to me that the water
department is operating inefficiently or that the water commissioners
have been less than responsible in the discharge of their duties, there
appears to be a complete lack of accountability to the town of Tisbury,
particularly with respect to financial matters," she wrote.

The attorney suggested that the selectmen may want to contact the
Massachusetts Department of Revenue for assistance in rectifying the
situation, or they may want to convene a town meeting to amend the
legislation that created the water company. Legal action may also be
required, she said.

Mr. Bugbee said the board has made no decision about the next step,
focusing only on a meeting with the water commissioners.